Affordable housing proved to be a popular topic last week at the Second Annual Montgomery County Multifamily Summit, moderated by Ballard Spahr’s Roger D. Winston, Managing Partner of the firm’s Bethesda office.

The summit was designed to address, as a whole, the multifamily market in one of the country’s wealthiest counties. However, much interest was expressed in two County programs that could not be adequately covered in the time allotted. Because of that interest, Ballard Spahr reviews the issues below.

Moderately Priced Dwelling Units (MPDU)

Due to the failure of the MPDU program to adequately serve the targeted population in high-rise condominiums, the County Council has been exploring alternatives to the program, including developing an “alternative payment” schedule to provide funds for the County to establish units elsewhere. The amount of the payment had been under negotiation until the County Executive withdrew his support for the arrangement.

A Working Group was established to conduct the negotiations and is now going back to the drawing board to develop a program that provides the necessary housing in a cost-effective manner for both the residents and the developers.

Right of First Refusal (ROFR)

Under Chapter 53A of the Montgomery County Code, the County, the Housing Opportunities Commission (HOC), and any certified tenant organization each has a right to purchase a rental housing facility that is under contract for sale in the County. Ballard Spahr represents the ROFR Coalition, a group of 30 developers, multifamily housing owners, brokers, and industry leaders who have united to push for changes to the right of first refusal (ROFR) provisions of Chapter 53A of the Montgomery County Code.

ROFR Coalition members know firsthand how Chapter 53A affects their attempts to buy, sell, own, develop, and manage multifamily housing properties in the County. Transactions have been altogether avoided, unduly delayed, and made exponentially more costly because of Chapter 53A—all without resulting in a significant increase in affordable housing or other benefit to the County. Parties to a potential sale of a rental housing facility often find it impossible to predict if or when the transaction will close; even less predictable is the ultimate cost of such a transaction.

In seeking amendments to Chapter 53A, ROFR Coalition members have been, and continue to be, in communication with the County Executive, County Council members, the Director of the Montgomery County Department of Housing and Community Affairs, the Director of the Montgomery County Department of Economic Development, and representatives of the HOC. ROFR Coalition members understand the importance of affordable housing and are seeking amendments that would safeguard affordable housing in the County while fostering sound, cost-effective development and promoting a positive business environment.